Polk County has spent $26k on legal fees for water contract

Published 11:19 pm Thursday, October 15, 2015

By Leah Justice


After spending more than a year and $26,308, Polk County Commissioners are now back to square one after a failed water contract with the Inman-Campobello Water District (ICWD).

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ICWD notified the county last week that it was pulling out of a proposed contract that the two entities had been negotiating since last year.

Polk County’s proposed agreement with ICWD has cost the county $26,308 in legal fees to date. Those fees include  $9,100 to county attorney Jana Berg for her work on the proposed contract and $17,208 to the specialized law firm of Parker Poe Adams Bernstein. Those fees were paid over the last two fiscal years for the county.

ICWD made its decision to stop negotiations after receiving an opinion from consultants Black & Veatch, who strongly advised ICWD not to enter into the proposed contract.

The contract process has been more than a year with the first draft given by ICWD to Polk County last year that included ICWD paying for initial improvements to Lake Adger’s Turner Shoals Dam and water line infrastructure in Polk County. The initial draft contract included that if the contract were ever dismissed, the county would reimburse ICWD, with depreciation, for its investments in the county.

That option was taken to the N.C. Local Government Commission (LGC) in January 2015 to seek opinion of whether the state would approve the contract. The LGC told ICWD and the county it would not approve of the contract in that form because it could create a burden on county taxpayers. After the LGC meeting, the county announced it had spent as of February this year $7,625,667 on its water system.

A new draft of the contract came from ICWD in April this year, that eliminated the reimbursement clauses and instead including ICWD would have rights to Polk’s water for 75 years, the new terms of the proposed contract.

Polk made changes to the proposal, the most significant being for ICWD to maintain the Turner Shoals Dam for the entire 75-year term of the contract. That requirement seemed to be ICWD’s largest concern with the new proposal, given to ICWD in August.

ICWD’s general manager Jeff Walker told the county in an email announcing the halt of the contract that there are several concerning issues for ICWD in the county’s draft, but none more so than the requirement for ICWD to fully maintain the dam for 75 years.

Black & Veatch estimated that the Turner Shoals Dam could need $3.6 million worth of repairs over the next several years and given the proposed contract, ICWD would be investing $530,000 per year on average in Polk County’s system, which is too high for raw water. ICWD proposed a 75-year contract because officials said ICWD would not need to utilize Polk’s water for decades.

Black & Veatch also advised ICWD not to assume liability on the Turner Shoals Dam, a structure that it does not own.

Now Polk County will have to decide how to proceed with maintaining the dam. Polk is also faced with needed dredging of the lake.

In 2010, Polk County began saving annually for anticipated dam repairs that are expected to be required over the next several years. To date, the county has saved $721,710, according to the Polk County Finance Office. Polk began saving money in fiscal year 2010, with seed money of $10,000. In FY 2011, the county saved $200,000 then in 2012, saved $190,000. In FY 2013, Polk saved $200,000 again and in 2014 backed the savings to $100,000. In fiscal years 2015 and the current 2016 budget, the county has saved $50,000 each year. The total savings includes money saved as well as money spent on repairs to the dam over those years.

Residents against the proposed contract with ICWD have said if the county had continued to save $200,000 per year, the county would have approximately $1.1 million saved for dam repairs today.

The Turner Shoals Dam is approximately 90 years old.

Polk County purchased Lake Adger for $1.6 million several years ago in hopes of using it as a reservoir in the future for a county water system. The Lake Adger watershed has been approved by the state and prior to last year’s discussions with ICWD, the county was planning on moving forward with an intake and constructing its own water plant to provide water in the future. The county will need at least 1,000 customers in order to construct its own water plant if it ever chose to do so.

According to ICWD, which currently operates the county’s water system, Polk currently has 288 water taps, of which 149 customers actually utilize the water. Polk and ICWD currently have an agreement for ICWD to operate Polk’s water system, with approximately seven years remaining on that contract.

Some current commissioners have said a water plant is too expensive with the majority saying that fact, paying for water plant operations and needed dam repairs is what sparked the proposed contract with ICWD to give a portion of Lake Adger’s water in exchange for ICWD running the county’s system and making repairs to the dam.

Commissioners have not yet publicly discussed ICWD’s decision to pull out of the contract. Commissioners meet on Monday, Oct. 19 at 7 p.m. in the Womack building, Columbus.